Spotlight on Surveillance

EPIC’s “Spotlight on Surveillance” project scrutinizes
federal government programs that affect individual privacy. For more information, see previous
Spotlights on Surveillance. This month, Spotlight surveys the
Basic Pilot employment eligibility verification system conducted jointly
by the Social Security Administration (SSA) and the Department of Homeland
Security.

Lawmakers are debating a bill, H.R. 4437, that would greatly expand the
Basic Pilot system, making its use mandatory for all employers nationwide.1 This
would cost $405 million from 2006-2010, according to the Congressional
Budget Office.2 In the Fiscal Year 2007 budget request,
President Bush seeks $135 million to expand Basic Pilot.3 However,
a recent Government Accountability Office review of the employment eligibility
verification program shows that the system is riddled with problems that
would be exacerbated by nationwide expansion.4

The Immigration Reform and Control Act of 1986 (IRCA) made it illegal
for employers to “knowingly” employ unauthorized workers, and
Basic Pilot grew out of the requirement for work-eligibility verification.5 Basic Pilot is a voluntary
employment eligibility verification system created in 1997 and implemented
in all 50 states.6 SSA also runs the Employee Verification System and
Social Security Number Verification System, which verify Social Security
numbers but do not verify employment eligibility.7

A new employee is required to fill out an Employment Eligibility Verification
form (commonly known as an I-9 form) stating that she is authorized to work
in the United States, and produce identification.8 This identification can
be a configuration of one or two documents from a list of 29 possible items,
including U.S passport, driver’s license, Social Security card, and
school ID card.9 Employers
do not need to verify the authenticity of the ID documents, but they do need
to keep a copy of them on file.10 The documents must
merely pass a good-faith test: Do they look real? If an employee is found
to be unauthorized, the employer must terminate her employment. Employers
who do not end employment of unauthorized workers or who knowingly hire unauthorized
workers may be fined up to $11,000 for each ineligible employee.11

In Basic Pilot, run by DHS’s Citizenship and Immigration Services,
the employer voluntarily fills out an online form with the new employee’s
name, date of birth and Social Security Number within three days of the employee’s
hire date. This information is checked against Social Security Administration
databases to verify identity and, if the employee is a non-citizen, her data
is then checked against Homeland Security Databases to verify employment eligibility.
If eligibility cannot be confirmed, Basic Pilot sends a tentative nonconfirmation
of work authorization status. The employee has eight working days to contest
this decision.

In August 2005, the Government Accountability Office reviewed Basic Pilot
and found several problems, the most significant being that the program could
not detect identity fraud.12 Other problems include employer noncompliance and
Homeland Security delays and errors in entering information into its databases.13 GAO also said rampant document and identity fraud “have
made it difficult for employers who want to comply with the employment verification
process to ensure that they hire only authorized workers and have made it
easier for unscrupulous employers to knowingly hire unauthorized workers.”14

There
are 29 documents that can be used, in various configurations,
to
establish identity and employment eligibility.

The significant identity fraud problem in the program is this: Basic
Pilot can verify if identification documents are real, but the program
cannot verify that the documents belong to the employee who supplies
them. “In addition, the Basic Pilot Program does not assist employers
in verifying the work authorization status of employees whose status
requires reverification and therefore does not help employers detect
document or identity fraud in the reverification process,” GAO
said.15

The identity fraud problem stems from the use of the Social Security
card as an identification document. “The card was never intended
and does not serve as a personal identification document -- that is,
the card does not establish that the person presenting the card is actually
the person whose name and SSN appear on the card,” Frederick G.
Streckewald, SSA Assistant Deputy Commissioner, said in Congressional
testimony in March.16 He continued, saying, “Although
we have made the card counterfeit resistant, it does not contain information
that would allow the card to be used as proof of identity.”

Also in Congressional testimony in March, EPIC Executive Director Marc
Rotenberg explained that the widespread use of Social Security numbers
in the private sector contribute to identity theft; they are considered
the “keys to the kingdom” to obtain records about individual
consumers.17 He detailed the problems
that would occur if Social Security numbers became the basis for linking
different record systems:

As these uses are expanded to determine citizenship, for example, or
to determine employment eligibility, the increasing risks of misuse expand
as well, as do the targets of opportunity and incentives for people to
take advantage of the Social Security number and use it in ways that
will cause actual harm and crime to individuals.18

Citizenship and Immigration Service officials explained another problem
with a nationwide expansion of Basic Pilot. They told GAO that an expansion
would create significant backlogs in employment verification.19 One problem is that,
in fiscal year 2004, “about 15 percent of queries authorized
by DHS required manual verification by immigration status verifiers.”20 In
2005, there were about 1 million Basic Pilot verifications.21 Some
of these manual verifications took up to two weeks to resolve.22

Of 6.5 million eligible employers nationwide, about 8,000 are enrolled
in the voluntary Basic Pilot program.23 However, in fiscal year 2004, only
2,300 employers used the system.24

Current legislation being debated in Congress, H.R. 4437, would mandate
that all employers use Basic Pilot to check the employment eligibility
of all new hires. By 2009, three years after the bill’s enactment,
federal, state, and local governments and some private employers would
need to use Basic Pilot to verify employment eligibility of all employees;
this would encompass about 25 million people.25 By 2012, all other employers would
need to verify employment eligibility for all employees, about 120
million workers, according to the Congressional Budget Office.26 If
Basic Pilot is expanded nationwide, its significant problems must first
be fixed to avoid substantial negative effects on the public workforce.

16 Statement
of Frederick G. Streckewald, Assistant Deputy Commissioner, Disability
and Income Security Programs, Social Security Administration, at a
Hearing on Social Security Number High-Risk Issues Before the Subcommittee
on Social Security of the U.S. House of Representatives Committee on
Ways and Means (Mar. 16, 2006)

17 Testimony
of Marc Rotenberg, President and Executive Director, Electronic Privacy
Information Center, at a Hearing on Social Security Number High-Risk
Issues Before the Subcommittee on Social Security of the U.S. House
of Representatives Committee on Ways and Means (Mar. 16, 2006) (Prepared
Statement for the Record, available athttp://www.epic.org/privacy/ssn/mar_16test.pdf).

21 Testimony
of James B. Lockhart III, Deputy Commissioner of Social Security, Social
Security Administration, at a Hearing on Social Security Number High-Risk
Issues Before the Subcommittee on Social Security of the U.S. House
of Representatives Committee on Ways and Means (Feb. 16, 2006).